Mexico readies for a fight with Heineken over alleged misuse of protected name ‘Tequila’

Mexico’s Tequila Regulatory Council (CRT) is preparing for a drawn-out legal battle against Heineken N.V. over what it alleges is the Dutch brewer’s use of the word “Tequila”, a protected name on its Desperados Lager beer when the brew does not contain the spirit.

We cannot permit someone unscrupulously to affect tequila’s prestige,” said Ramon Gonzalez, CRT Director-General.

Either they take the word tequila off it, or they put some tequila in”. If they refuse, “we’ll have no choice but to fight this in court,” he said.

The council alleges that tests performed on the brand show it does not contain tequila, even though Heineken has been marketing it as a “daring” brew flavoured with tequila to make it “refreshing and wild”. The council has given Heineken to the end of the month to stop labelling its bottles with the word “tequila”.

A spokesperson for Heineken, Michael Fuchs said, “Desperados is a beer flavoured with tequila. The flavouring we use contains tequila, which we buy in Mexico from one of the members of the CRT. We make sure the product fully complies with all regulations and labeling requirements.”

We would like to emphasize that Desperados and the CRT cover a lot of common ground: were all huge tequila lovers and through the Desperados brand, we promoted the greatness of tequila in 85 markets across the world.”

Desperados beer brand is one of Heineken’s bestselling beers, with 2016 sales of $1.2bn, a 17% rise from the previous year in both value and volume, according to London-based International Wines and Spirits (IWSR).

Besides being the world’s biggest exporter of beer, Mexico is also the sole producer of tequila, which is made from Blue Weber agave plant in certain regions of the country.

CRT considers tequila a protected name and under its rules, 25% or 51% of a prepared beverage’s alcohol content depending on the category, must contain tequila for it to bear the spirit’s name. The label must also bear a number that identifies the tequila producers and the batch number. The council likens tequila to France’s cognac and champagne or Scotch whisky which is protected by a designation of Origin but also by how and where it can be made and how it can be marketed.

Tequila branded spirits sold roughly 260m-litres worldwide in 2016, according to IWSR. A carefully crafted brand building has helped make it one of the fastest-growing spirits categories in the world. Revenue from both the high-end tequilas and the 51% agave varieties reached $7bn in 2016, says IWSR.

Mr. Gonzalez said he still hopes Heineken would stop using the name and “stick to the rules” and that the dispute could be resolved this month. If not, the CRT is prepared to take “any action to regulate or eliminate fraudulent use” of Mexico’s signature spirit, he added.

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